Published: Wednesday, July 30, 2014 at 5:56 p.m.

Last Modified: Wednesday, July 30, 2014 at 5:56 p.m.

State Rep. Susi Hamilton wanted to make a political point at Wednesday morning's meeting of the House Finance committee.

During the meeting to discuss a Senate bill involving business incentives, the Wilmington Democrat asked N.C. Commerce Secretary Sharon Decker why the state felt it needed a "closing fund" to help with economic development efforts.

Decker said North Carolina needed the fund, which would allow the state to offer up-front money, to match what other states offer and help promote job development and investment – particularly in luring large manufacturers to the Tar Heel State. Continental Tire is widely believed to have chosen South Carolina over Brunswick County three years ago because South Carolina could offer up-front money.

But if that's the case, Hamilton asked, why then is the state looking to scrap or reduce existing incentive programs – like film and historic preservation – that have a proven track record of doing just that? "Why are we abandoning those existing tools and creating new programs for jobs that don't exist in North Carolina yet?"

Rep. Julia Howard, senior chair of the committee, quickly brought the discussion back to the bill at hand, saving Decker from having to answer the politically loaded question.

But Hamilton had made her point, noting later that getting rid of the state picking "winners and losers" is why the GOP has said it's scrapping industry-specific incentive programs in favor of lower taxes across the board.

Time running out

With time on the legislative short session running out, film backers are scrambling to make sure the incentive program – and maybe the state's film industry – doesn't wither away.

But ways to add more money to the film incentive proposal included in the budget compromise announced by state House Speaker Thom Tillis, R-Mecklenburg, and Senate Leader Phil Berger, R-Rockingham, on Tuesday seem few and far between.

Legislators are eager to head home for the summer, and the Senate has appeared especially reluctant to approve anything that approaches the existing incentive program.

Wednesday pro-film legislators, many from Southeastern North Carolina, were huddling with party and committee leaders looking for ways to see how they could boost the film incentive program. But little, at least publicly, was being said on how the efforts were going.

"We know there are lots of talks going on," said Tony McEwen, Wilmington's director of legislative affairs. "There's still time."

State Rep. Ted Davis Jr., R-New Hanover, said he and other members of the local delegation are pursuing several angles to find a way to boost the film program. But with so many interests from teacher pay to ballooning Medicaid expenses competing for scare dollars, it's a real challenge.

"The main concern is about the money," Davis said late Wednesday afternoon. "How do you get the money to pay for all of these things, because everything comes with a price."

Focus is believed to be on adding language to an existing bill still working its way through the General Assembly. That method has been used before to protect and strengthen the state's film incentive program.

"In the waning moments of the past legislative sessions, film has been recognized as an important economic engine to the North Carolina economy," said Bill Vassar, executive vice president of EUE/Screen Gems Studios, in a statement Tuesday afternoon. "We are hopeful for similar results in this session before the end of this week."

Program's worth questioned

To many of those skeptical of film incentives, the existing state program is little more than corporate welfare for Hollywood elites that creates only temporary jobs and no lasting investment in the state. An internal study by the Commerce Department found that the incentive program actually ends up costing the state money, and even Gov. Pat McCrory has come out in favor of a tweaked incentive program that promotes long-term capital investment by the film industry with long-term job potential.

But to film backers, the state's film tax credit program – which was tweaked in 2010 to make it more competitive with programs in other states – employs thousands of North Carolinians, generates revenue for the state, and is a great tourism marketing tool nationally and internationally.

An estimated 2,000 jobs are directly tied to the industry in Southeastern North Carolina, according to a study conducted by researchers at N.C. State University released earlier this year.

The film industry enjoyed its best year ever in 2012 with $334 million in total spending – and receiving $83 million in tax credits.

Supporters have said the state's film industry could experience a significant downturn if there are no changes to the current plans to turn the existing tax credit program into a $10 million grant program for the first half of 2015 – with no guarantee there will be any incentive money available after July 2015.

Johnny Griffin, director of the Wilmington Regional Film Commission, has said that based on his office's calculations of current projects in Southeastern North Carolina and the likelihood of their return business, the incentive would need to – at minimum – offer $40 million in funds to maintain what the industry already hosts.

The current film incentives package, which has no maximum amount the state can pay out in a single year, allows production companies to claim 25 percent of their qualifying expenses up to $20 million for production companies that spend at least $250,000.

<p>State Rep. Susi Hamilton wanted to make a political point at Wednesday morning's meeting of the House Finance committee.</p><p>During the meeting to discuss a Senate bill involving business incentives, the Wilmington Democrat asked N.C. Commerce Secretary Sharon Decker why the state felt it needed a "closing fund" to help with economic development efforts.</p><p>Decker said North Carolina needed the fund, which would allow the state to offer up-front money, to match what other states offer and help promote job development and investment – particularly in luring large manufacturers to the Tar Heel State. Continental Tire is widely believed to have chosen South Carolina over Brunswick County three years ago because South Carolina could offer up-front money.</p><p>But if that's the case, Hamilton asked, why then is the state looking to scrap or reduce existing incentive programs – like film and historic preservation – that have a proven track record of doing just that? "Why are we abandoning those existing tools and creating new programs for jobs that don't exist in North Carolina yet?"</p><p>Rep. Julia Howard, senior chair of the committee, quickly brought the discussion back to the bill at hand, saving Decker from having to answer the politically loaded question.</p><p>But Hamilton had made her point, noting later that getting rid of the state picking "winners and losers" is why the GOP has said it's scrapping industry-specific incentive programs in favor of lower taxes across the board.</p><p><b>Time running out</b></p><p>With time on the legislative short session running out, film backers are scrambling to make sure the incentive program – and maybe the state's film industry – doesn't wither away.</p><p>But ways to add more money to the film incentive proposal included in the budget compromise announced by state House Speaker Thom Tillis, R-Mecklenburg, and Senate Leader Phil Berger, R-Rockingham, on Tuesday seem few and far between.</p><p>Legislators are eager to head home for the summer, and the Senate has appeared especially reluctant to approve anything that approaches the existing incentive program.</p><p>Wednesday pro-film legislators, many from Southeastern North Carolina, were huddling with party and committee leaders looking for ways to see how they could boost the film incentive program. But little, at least publicly, was being said on how the efforts were going.</p><p>"We know there are lots of talks going on," said Tony McEwen, Wilmington's director of legislative affairs. "There's still time."</p><p>State Rep. Ted Davis Jr., R-New Hanover, said he and other members of the local delegation are pursuing several angles to find a way to boost the film program. But with so many interests from teacher pay to ballooning Medicaid expenses competing for scare dollars, it's a real challenge.</p><p>"The main concern is about the money," Davis said late Wednesday afternoon. "How do you get the money to pay for all of these things, because everything comes with a price."</p><p>Focus is believed to be on adding language to an existing bill still working its way through the General Assembly. That method has been used before to protect and strengthen the state's film incentive program.</p><p>"In the waning moments of the past legislative sessions, film has been recognized as an important economic engine to the North Carolina economy," said Bill Vassar, executive vice president of EUE/Screen Gems Studios, in a statement Tuesday afternoon. "We are hopeful for similar results in this session before the end of this week."</p><p><b>Program's worth questioned</b></p><p>To many of those skeptical of film incentives, the existing state program is little more than corporate welfare for Hollywood elites that creates only temporary jobs and no lasting investment in the state. An internal study by the Commerce Department found that the incentive program actually ends up costing the state money, and even Gov. Pat McCrory has come out in favor of a tweaked incentive program that promotes long-term capital investment by the film industry with long-term job potential.</p><p>But to film backers, the state's film tax credit program – which was tweaked in 2010 to make it more competitive with programs in other states – employs thousands of North Carolinians, generates revenue for the state, and is a great tourism marketing tool nationally and internationally.</p><p>An estimated 2,000 jobs are directly tied to the industry in Southeastern North Carolina, according to a study conducted by researchers at N.C. State University released earlier this year.</p><p>The film industry enjoyed its best year ever in 2012 with $334 million in total spending – and receiving $83 million in tax credits.</p><p>Supporters have said the state's film industry could experience a significant downturn if there are no changes to the current plans to turn the existing tax credit program into a $10 million grant program for the first half of 2015 – with no guarantee there will be any incentive money available after July 2015.</p><p>Johnny Griffin, director of the Wilmington Regional Film Commission, has said that based on his office's calculations of current projects in Southeastern North Carolina and the likelihood of their return business, the incentive would need to – at minimum – offer $40 million in funds to maintain what the industry already hosts.</p><p>The current film incentives package, which has no maximum amount the state can pay out in a single year, allows production companies to claim 25 percent of their qualifying expenses up to $20 million for production companies that spend at least $250,000.</p><p><a href="http://www.starnewsonline.com/section/topic9924"><b>Gareth McGrath</b></a>: 343-2384</p><p>On <a href="http://www.starnewsonline.com/section/news41"><b>Twitter</b></a>: @Gman2000</p>